EFM’s Pitts on Lotus Midstream exit; Hg goes for treasure management software; Clearview recaps Inventive

Good morning Hubsters, Nina Lindholm here with the Thursday Wire.

We open today with an exit, as Obey Martin Manayiti speaks to EnCap Flatrock Midstream managing partner Samuel Pitts about the sale of Lotus Midstream, a crude oil gathering and transportation company.

Elsewhere, we have Hg snapping up a majority stake in treasure management software provider GTreasure, Kaho Partners-backed Addtronics picking up Bow Robotics, a provider of spare-parts, rebuild and repair services and preventative maintenance for industrial robots. We also have a recapitalization by Clearview involving Inventive, a maker of products for the towing, fishing, ATV/UTV and garage end-markets.

Oil gathering
Let’s kick off with an exit as they are a bit of a rare sight these days. PE Hub’s Obey Martin Manayiti caught up with Samuel Pitts, a managing partner at EnCap Flatrock Midstream, to learn more about the firm’s recent $1.45 billion exit from Lotus Midstream.

Sugar Land, Texas-based Lotus Midstream focuses on crude oil transportation, terminaling and storage. It owns the Centurion Pipeline System, an integrated network of crude oil gathering and transportation pipelines that extends approximately 3,000 miles from southeast New Mexico across the Permian Basin of West Texas to Cushing, Oklahoma.
Since EnCap Flatrock Midstream acquired the company in 2018, oil production in the Permian Basin has increased by about 50 percent, according to Pitts.

“When we invested in the business and made the original acquisition, we had a very specific investment strategy and execution plan,” Pitts told Obey. “It centered around a commercial vision for the asset that required engineering, operations, commercial, finance and executive disciplines that we already had in place. The team was exceptional and executed exactly like we had laid out when we made the investment.”

When EnCap Flatrock bought the business in 2018, it was connected to seven transportation lines and at the time of exit, it had increased that downstream access to 14 lines.

You can read Obey’s full story here.

Risk management
Moving on to a treasury software deal. Hg, a London-headquartered software focused investor, made a majority investment in GTreasury, a Chicago-based treasury, payments and risk management software provider.

The GTreasury management team and former majority owner, San Francisco-headquartered Mainsail Partners, will continue as investors.

GTreasury’s treasury management systems (TMS) products aim to assist treasury departments with managing liquidity needs, payment execution, bank relationships, FX hedging, and auditing and compliance requirements.

“TMS software is becoming an increasingly critical segment within the office of the CFO, with companies continuing to focus on their cash and liquidity visibility and needs,” said Louis Kinsella, director at Hg. “This is a really long-term trend, and we’re delighted to be backing a great businesses and team which is at the forefront of this sector.”

Robotics
Next up we have an add-on. Addtronics, which is backed by Kaho Partners, acquired West Chester, Ohio-based Bow Robotics, a provider of spare-parts, rebuild and repair services and preventative maintenance for industrial robots.

Bow was founded in 2009 by William Bow, who will continue to lead the company as president.

Kaho Partners formed Addtronics, a holding company dedicated to acquiring and growing robotic automation providers in October.

“This acquisition officially launches our expansion into aftermarket services,” said Max Katzenstein, co-founder of Addtronics and managing partner of Kaho in a statement. “The addition of Bow Robotics will augment our strong position in system design and integration with the capability to offer a wider suite of services to our customers.”

In tow
Lastly, let’s look at a recapitalization. Clearview Capital has recapitalized Inventive, an Idaho-based maker of products for the towing, fishing, ATV/UTV and garage end-markets.
Inventive will continue to be led by Chuck Ceccarelli, the company’s executive director and founder, who retained a significant equity stake in the recapitalized business.

“Inventive’s domestic manufacturing capabilities coupled with the Vertikal Brands team’s market expertise, product development capabilities and marketing proficiency will enable the company to continue to expand into broader markets and accelerate growth,” said Matt Blevins, managing partner of Clearview Capital, in a statement.

That’s all from me. Obey Martin Manayiti will write to you tomorrow to close the week.

Cheers,

Nina